How to Avoid Paying £30k in Employee Replacement Costs

We weren't entirely surprised to hear that the cost of replacing an employee is high, but that doesn't mean we weren't slightly taken aback to see a solid figure placed on the amount it costs to find and integrate new talent into your business when someone leaves – a cool £30,614, no less!

The result, published by Oxford Economics, breaks down the cost of replacing staff and illuminates that it is the process of bringing a new employee up to speed with the business that incurs the highest fee for companies (accounting for £25k of the overall total). We’re sure that all businesses will agree that paying out in excess of £30k per lost employee is a little steep. Fortunately, there are steps that you can take which will significantly reduce the risk of you having to replace staff members quite as frequently; from improving your talent acquisition strategy, to ensuring that your existing teams are thoroughly engaged in their roles.

1. Improve Your Talent Acquisition Strategy

It’s typically acknowledged that getting your recruitment process right means that you will ensure that the candidate has the skills and experience for the role, but that’s really only the tip of the iceberg. Even with all of the right knowledge, if an employee joins the company to find that the on-boarding process is terrible, that the company doesn't match up to their expectations, or that they don’t suit the work environment, there is little that you can do at that point to prevent them from leaving. Furthermore, the money you've already invested into recruiting and integrating them into the business? That suddenly rises as you find yourself on the search for a candidate once again (you see where the £30k comes from now?).

2. Have Clear Objectives

Effective job analysis helps to evaluate the skills, experience and behaviours that you are looking for and help to avoid over recruiting or under recruiting for a position. Clear communication of the main responsibilities of the role and what a “typical day” looks like gives potential candidates an accurate impression of the demands of the position.

3. Make Sure Your Employer Brand is Real

Cultural fit is a term that is well versed when recruiting, but few employers truly understand the weight of its implications. It involves ensuring that a candidate shares the same values, behaviours and aspirations of the company before they join. In order to do this, your employer brand should accurately reflect what your business is all about; this will help to attract the right people to you from the outset. The values and behaviours that you deem as important factors in achieving success at your company should be highlighted throughout every stage of your recruitment process – from the initial job ad, to the day that the candidate arrives on site.

4.  Promote From Within

One of the most cost-effective ways to replace team members is to promote people from your existing employee base. The benefits of doing this are multiple; you won’t have to wait for a notice period to end to welcome your employee onboard; the time it takes bring them up to speed with their role will be greatly reduced as they’re already familiar with how the company works; your levels of employee engagement in the wider business will improve, as they see the potential for career progression within your firm.

5. Motivate and Engage Your Employees

The equation is simple: motivated employees = an engaged workforce. An engaged workforce means your turnover will be lower, productivity will be up and you’ll develop a strong, loyal workforce that will inadvertently attract new talent to the business. In their whitepaper on The Puzzle of Motivation, recruitment group Resource Solutions Group states that modernising your motivation strategy should begin with reviewing whether your performance management process really gets the best out of your employees. As part of this, you should consider not only your employees’ pay, but also their contracted hours, flexible working arrangements and the level of autonomy they have over how they work.

Learn How to Improve Your Employee Engagement Strategy

As a business, you won't always be able to prevent all employees from moving on. However, following these steps can have a significant impact on reducing the cost of replacing employees. For a full guide on how to improve your employee motivation and engagement strategies:

Download the RSG whitepaper on The Puzzle of Motivation.